JOLLY MAKER 1 PREMISES CO-OP SOC. LTD, MUMBAI v. JCIT 12(2), MUMBAI

ITA 3503/MUM/2009 | 2005-2006
Pronouncement Date: 10-03-2010 | Result: Allowed

Appeal Details

RSA Number 350319914 RSA 2009
Bench Mumbai
Appeal Number ITA 3503/MUM/2009
Duration Of Justice 9 month(s) 11 day(s)
Appellant JOLLY MAKER 1 PREMISES CO-OP SOC. LTD, MUMBAI
Respondent JCIT 12(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 10-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 10-03-2010
Assessment Year 2005-2006
Appeal Filed On 29-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH J MUMBAI BEFORE SHRI PRAMOD KUMAR AM & SMT. P.MADHAVI DEVI JM I.T.A.NO.3503/MUM/2009 - A.Y. 2005-06 JOLLY MAKER 1 PREMISES CO-OP. SOCIETY LIMITED 95/97 CUFFE PARADE MUMBAI 400 005. PAN NO.AAAJJ 005E VS. JT. COMMISSIONER OF I.T. 12(2) MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SANJIV M. SHAH. REVENUE BY : SHRI L.K.AGARWAL. O R D E R PER P.MADHAVI DEVI JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST CI T(A)S ORDER DATED 20-2-2009. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL- I-01 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED AO ERRED IN DISALLOWING RS.7 57 718/- ON ACCOUNT OF DEDUCTION OF SOCIETY CHARGES IN RESPECT OF PROPERTY LET OUT. I-01 THE APPELLANT SUBMIT THAT THE EXPENDITURE OF RS.7 57 718/- IS INTEGRAL TO THE EARNING OF THE INC OME AND HAS DIRECT NEXUS AS COST OF SERVICES PROVIDED AND HENCE THIS MAY ALLOWED. THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS.7 51 718/- AND THIS MAY BE DELETED. II-01 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED AO ERRED IN ADDING RS.19 35 625/ - COLLECTED AS CONTRIBUTION TO COMMON AMENITIES FUND/BUILDING DEVE LOPMENT FUND BY MEMBERS AT THE TIME OF TRANSFER. II-02 THE APPELLANT SUBMITS THAT THE AD OF RS.19 3 5 625/- TO THE DECLARED INCOME BE DELETED AND JUSTICE MAY BE R ENDERED. 2 3. AT THE TIME OF HEARING THE LD.COUNSEL FOR THE A SSESSEE SUBMITTED THAT GROUND OF APPEAL NO.I RELATING TO TH E DISALLOWANCE OF RS.7 57 718/- ON ACCOUNT OF DEDUCTION OF SOCIETY CH ARGES IN RESPECT OF ANNUAL LETTING VALUE OF THE PROPERTY IS COVERED BY THE FOLLOWING DECISIONS- A) REALTY FINANCE AND LEASING V. ITO 5 SOT 384 [MU M] B) SHARMILA TAGORE V. JCIT [2005] 93 TTJ 483 [MUM] C) VERMA FAMILY TRUST VS. ITO [1984] 7 ITD 392 D) BOMBAY OIL INDS. VS. DCIT 82 ITD 626 [MUM] 4. THE LD.DR ON THE OTHER HAND RELIED ON THE ORDE RS OF THE AUTHORITIES BELOW. 5. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE ASSES SEE IS A COOPERATIVE SOCIETY AND HAS OFFERED INCOME FROM HOUSE PROPERTY IN RESPECT OF ITS NARIMAN BHAVAN PREMISES AT NARIMAN POINT. AO OBSERV ED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.7 57 718/- ON ACCOUNT OF SOCIETY CHARGES. HE HELD THAT THE SAME IS NOT COVERED U/S.2 4 OF THE ACT AND ALSO THAT FOR THE ASSESSMENT YEARS 2002-03 2003-04 AND 2004-05 NO DEDUCTION ON ACCOUNT OF SOCIETY CHARGES HAS BEEN CL AIMED OR ALLOWED IN THOSE YEARS. HE ACCORDINGLY DISALLOWED THE SAM E AND ADDED IT TO THE INCOME OF THE HOUSE PROPERTY. 6. AGGRIEVED ASSESSEE FILED AN APPEAL BEFORE THE C IT(A) WHO CONFIRMED THE SAME AND ASSESSEE IS IN SECOND APPEAL BEFORE US. 3 7. WE FIND THAT THE ISSUE IS COVERED BY THE DECISI ONS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE [CITED SUPRA] WH EREIN IT WAS HELD THAT THE SOCIETY CHARGES PAID BY THE ASSESSEE IN RE SPECT OF ITS LET OUT PROPERTIES WERE ALLOWABLE WHILE COMPUTING THE ANNUA L VALUE AND RESPECTFULLY FOLLOWING THE SAME WE ALLOW THIS GROUN D OF APPEAL. 8. AS REGARDS GROUND NO.2 WE FIND THAT THE AO ADDE D AN AMOUNT OF RS.19 35 625/- CLAIMED AS CONTRIBUTION TO COMMON AMENITY FUND/BUILDING DEVELOPMENT CHARGES BY MEMBERS AT THE TIME OF TRANSFER OF FLAT. WITH REGARD TO THIS ISSUE THE ASSESSEE HA S PLACED RELIANCE UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF MITTAL COURT PREMISES CO-OPERATIVE SOCIETY LTD. VS. ITO REPORTED IN 320 ITR 414 WHEREIN IT HAS BEEN HELD AS UNDER- (I) THAT THE BYE-LAWS OF THE CO-OPERATIVE SOCIETY WAS THE CONTRACT BETWEEN THE SOCIETY AND THE MEMBER. UNDER THESE BYE -LAWS IT WAS THE MEMBER WHO HAD TO MAKE THE PAYMENT. THERE WAS A N AGREEMENT BY WHICH THE AMOUNT WAS PAID BY THE TRANSFEREE. IN SO FAR AS THE SOCIETY WAS CONCERNED EVEN IF THE RECEIPT WAS ISSU ED IN THE NAME OF THE TRANSFEREE IT WAS IN THE NATURE OF ADMISSION FE E WHICH COULD BE APPROPRIATED ONLY ON THE TRANSFEREE BEING ADMITTED . MERELY BECAUSE THE AMOUNT MAY BE APPROPRIATED EARLIER IT WOULD NO T LOSE THE CHARACTER OF THE AMOUNT BEING PAID BY A MEMBER. IN THESE CIRCUMSTANCES THE IDENTITY OF THE CONTRIBUTOR AND BENEFICIARY BEING SATISFIED AND CONSIDERING THE PROVISIONS OF THE MAH ARASHTRA CO- OPERATIVE SOCIETIES ACT AND THE RULES FRAMED THEREU NDER SURPLUS COULD BE DISPOSED OF ONLY IN FAVOUR OF THE MEMBERS OR FOR THE OBJECTS WHICH THEY MAY SPECIFY. THE CONTRIBUTION TO COMMON AMENITY FUND/REPAIRS AND WELFARE FUND BEING THE FIRST CONTR IBUTION MADE BY THE EXISTING/NEW MEMBER WAS NOT TAXABLE. SIND CO-OPERATIVE HOUSING SOCIETY V. ITO [2009] 317 ITR 47 (BOM) FOLLOWED. 9. HAVING GONE THROUGH THE FACTS OF THE CASE BEFORE US AND ALSO THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE O F MITTAL COURT 4 PREMISES CO-OPERATIVE SOCIETY LTD. [CITED SUPRA] W E FIND THAT FACTS ARE SIMILAR AND THE ISSUE IS COVERED BY THE SAID DECISI ON. RESPECTFULLY FOLLOWING THE SAME THIS GROUND OF APPEAL IS ALLOWE D. 10. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED ON THIS 10TH DAY OF MARCH 2010. SD/- SD/- (PRAMOD KUMAR) (P.MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI: 10 TH MARCH 2010. P/-*